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New rules on energy efficiency should get landlords thinking of improvements now

22nd Feb 2012

New rules are being phased in over the next six years that will ultimately see landlords unable to rent out properties with the worst energy efficiency ratings.

As part of the government's efforts to improve the energy performance of the UK's housing stock, it is introducing regulations that will see landlords unable to refuse tenants who ask for consent to make "reasonable" energy efficiency improvements from 2016.

Two years later, in 2018, landlords with buy-to-let properties will no longer be able to rent out the worst-performing properties - those with an F or G rating.

As former energy secretary Chris Huhne explained at the time this was announced: "We will of course seek to work with landlords well in advance to support their take-up of the green deal. The precise form of these regulations will be subject to the usual scrutiny processes."

While these dates are still some way off, it is never too early for landlords to begin planning for a more energy-efficient portfolio. And it is definitely something you should factor in when making new acquisitions – will there be significant costs involved in bringing a new property up to standard in six years' time?

The British Property Federation believes landlords of UK property should already be doing what they can to carry out sustainable improvements.

Ian Fletcher, director of real estate policy for the group, explained: "If you have to do significant works, then it is better to do it in a period where you perhaps have a void in the property when it is not being let out."

One thing worth keeping in mind is that an energy-efficient property will be more valuable on the market than one with a poor performance rating if you do decide to sell.

As 2018 draws nearer, it is likely that those buildings with F and G ratings will drop significantly in value, with other landlords and investors knowing they will need to undertake significant and costly work before they can rent them out to tenants.